Correlation Between IShares Smart and IShares Govt
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By analyzing existing cross correlation between iShares Smart City and iShares Govt Bond, you can compare the effects of market volatilities on IShares Smart and IShares Govt and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares Smart with a short position of IShares Govt. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Smart and IShares Govt.
Diversification Opportunities for IShares Smart and IShares Govt
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and IShares is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding iShares Smart City and iShares Govt Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Govt Bond and IShares Smart is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares Smart City are associated (or correlated) with IShares Govt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Govt Bond has no effect on the direction of IShares Smart i.e., IShares Smart and IShares Govt go up and down completely randomly.
Pair Corralation between IShares Smart and IShares Govt
Assuming the 90 days trading horizon iShares Smart City is expected to generate 1.21 times more return on investment than IShares Govt. However, IShares Smart is 1.21 times more volatile than iShares Govt Bond. It trades about 0.25 of its potential returns per unit of risk. iShares Govt Bond is currently generating about -0.17 per unit of risk. If you would invest 705.00 in iShares Smart City on October 24, 2024 and sell it today you would earn a total of 17.00 from holding iShares Smart City or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
iShares Smart City vs. iShares Govt Bond
Performance |
| Timeline |
| iShares Smart City |
| iShares Govt Bond |
IShares Smart and IShares Govt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Smart and IShares Govt
The main advantage of trading using opposite IShares Smart and IShares Govt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Smart position performs unexpectedly, IShares Govt can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in IShares Govt will offset losses from the drop in IShares Govt's long position.| IShares Smart vs. iShares Govt Bond | IShares Smart vs. iShares Global AAA AA | IShares Smart vs. iShares Smart City | IShares Smart vs. iShares Broad High |
| IShares Govt vs. iShares Global AAA AA | IShares Govt vs. iShares Smart City | IShares Govt vs. iShares Broad High | IShares Govt vs. iShares Emerging Markets |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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